New report finds Hudson Tunnel Project will generate $19.6 billion in economic activity

A report from Regional Plan Association (RPA) found that the Hudson Tunnel Project will incrementally generate $19.6 billion in economic activity and create approximately 95,000 jobs. With that will come the challenge of finding people to do those jobs.

According to a new analysis conducted for the Gateway Development Commission, the early work investments Hudson Yards Concrete Casing Section 3; Tonnelle Avenue Bridge and Utility Relocation; and Hudson River Ground Stabilization) will yield 7,500 jobs and generate $1.5 billion in economic output.

If the same multipliers are applied to the total direct spend for the Hudson Tunnel Project, the $16.04 billion project will incrementally generate $19.6 billion in economic activity and create approximately 95,000 jobs during its construction– 20,000 more jobs than was previously estimated in the 2017 Environmental Impact Study.

The majority of direct jobs are for construction and will largely be filled by regional union workers, and the remaining jobs are positions created through direct and induced spending. This large number of jobs created by the Hudson Tunnel Project also means the tri-state region needs to prepare an adequate workforce to meet this demand over the 10+ year lifespan of the project, RPA reported.

The United States currently faces a shortage of construction workers, with more people retiring from the industry than those who are entering it. The Associated Builders and Contractors estimates there was a shortage of 650,000 construction workers nationwide in 2023, and that number is surely growing.

This challenge is in part the result of two good things: the post-pandemic economic resurgence, and the 2021 Bipartisan Infrastructure Law. Projects that were stalled during the peak of the COVID-19 pandemic are ready to move forward. The 2021 Bipartisan Infrastructure Law scored unprecedented sums of money for states to improve their transportation systems and launch offshore wind and other renewable energy projects (among other things). The region should continue to plan proactively so that these critical projects won’t compete for limited labor available to get them built.

One proactive approach to ensure a large and long-term workforce for the Hudson Tunnel Project is to expand streamlined apprenticeship programs that funnel trainees directly into career paths and strengthen recruitment efforts for underrepresented communities. The region could expand programs similar to New York’s Pathways To Apprenticeship, known as P2A, which recruits and trains people from low-income communities, particularly those in the re-entry community, for lifelong careers in union construction jobs.

It’s critical that new or improved apprenticeship programs or pre-apprenticeship programs have a direct line of work placement for graduates of the programs. Otherwise, newly trained apprentices are left with no clear career path in the industry, which can be challenging to navigate as an individual even with training. And by instituting a direct line of placement, matching trained apprentices to projects that need labor is a more streamlined and efficient practice.

Another recommendation is to build a ratio of apprentices to non-apprentices into the spec – such as 1:4 – for work on the Hudson Tunnel Project. This will lower costs (apprentices cost less than more experienced labor) and also provide an opportunity for the future workforce of the project to begin work on it in their training. It also gives apprentices the opportunity to work on the nation’s most important infrastructure project.

The RPA reported that the Hudson Tunnel Project has innumerable benefits for our region, but ranking high among them are the number of jobs created and economic activity generated. For every individual dollar invested in public transportation, our economy sees a return of $4?in additional economic output, resulting in more jobs and higher incomes.

The tunnel project will realize these long-term benefits by shortening travel times, increasing worker productivity, expanding the number of jobs that are accessible to residents in the region and the size of the workforce that employers can draw from.

Most importantly, it will provide the capacity for more workers to travel to and from jobs on both sides of the Hudson, a link that is vital to the region’s economy and future prosperity. In our 2023 report, The Commuter Dividend, RPA found that the combined effect of workers employed directly by New York City employers and those resulting from their purchasing power total 1.6 million jobs and $201 billion in earnings. The economic ties between New York and New Jersey are especially strong, with nearly half a million New Jersians working for New York City employers and generating over $60 billion in wages. A companion RPA report, Gateway and the Post-Covid Economy, found that even with more people working from home, the number of workers traveling between New York and New Jersey will grow beyond its pre-pandemic peak by the time the new tunnel is built.

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